finncap Group PLC (AIM:FCAP) confirmed it has received a takeover approach from fellow small-cap stockbroker Panmure Gordon.
The deal would be a cash bid by Panmure Gordon with an alternative for shareholders to receive shares if they elect.
Discussions are still at an early stage said finnCap, which specialises in AIM and small-cap stocks, with no guarantee any offer will be made.
Unlisted Panmure is run by Bob Diamond and Rich Ricci, the duo that at one point dominated Barclay's investment division with Diamond eventually becoming the blue-blood bank's CEO.
He stepped down from Barclays in 2012 after an incident-ridden spell in charge.
The approach to finnCap comes shortly after its long-time chief executive Sam Smith stepped down and at a time when there has been a dearth of new issues and fundraisings among small caps.
Reports at the weekend suggested finnCap was cutting ten of its 150- strong workforce to save money with other small cap broking specialists also making cutbacks.
Shares in finnCap rose 25% to 17p on the approach but are still half of their value a year ago.